General Motors is investing billions of dollars to build new electric vehicles and hopes to catch up with Tesla.
But the automaker appears far from achieving those ambitious goals. This year, it is struggling to produce a new type of electric car battery pack for electric vehicles to be introduced in the next several years.
“It’s been a little bit challenging,” the company’s chief financial officer, Paul Jacobson, said in a conference call with reporters on Monday afternoon.
In the first half of this year, GM made only 50,000 electric vehicles, and most of them used older battery packs made by the supplier. In the United States, GM sold fewer than 2,800 vehicles that used its new, modular Ultium battery packs, which were being built at the Ohio factory that the company owns by LG Energy Solutions. Two other Altium factories are under construction in Tennessee and Michigan.
GM once said it planned to manufacture 400,000 electric vehicles in North America from 2022 to 2024 and more than one million electric vehicles in 2025, most of which were to use Altium technology.
Mr. Jacobson said the company expected to make 100,000 battery-powered vehicles in the second half of 2023, and he would provide more details on production plans in a conference call with financial analysts on Tuesday.
As of now, the slow rollout is not affecting the company’s bottom line. GM said Tuesday that it posted $2.6 billion in profit from April to June, up 52 percent from a year earlier. Total revenue was $44.7 billion, up 25 percent.
Mr. Jacobson said the company has benefited from higher prices and stronger sales of trucks and sport utility vehicles in North America. The average price of vehicles sold by GM in the second quarter was $52,000 – about $1,600 more than in the first quarter of the year.
GM sold 833,000 cars and trucks in North America in the second quarter, up 26 percent from a year ago. In the rest of the world, it sold 147,000 vehicles, about 8,000 less than a year earlier.
Although the strong profits are welcome, many investors remain concerned about the company’s electric vehicle strategy because such vehicles are the fastest-growing segment of the auto industry.
A big fear for investors is that GM, Ford Motor and other big automakers could increasingly lose customers as more drivers buy battery-powered cars. In China, Europe and California, where electric vehicles already account for a significant and growing share of new car sales, once-dominant automakers such as Volkswagen and Toyota are losing market share to Chinese automakers such as Tesla and BYD.
Two years ago, GM’s chief executive, Mary T. Barra, said the company aimed to double annual revenue to about $280 billion by 2030. The majority of the increased business is believed to come from electric vehicles, and new revenue sources will come from software and services attached to those cars and trucks. The company also aims to phase out production of internal-combustion models by 2035.
Right now, GM is “far behind where they need to be,” said Sam Fiorani, vice president of global vehicle forecasting at Autoforecast Solutions, a consulting firm. “If they’re having trouble with the first wave of these new EVs, and if they can’t launch them, it doesn’t bode well for the next wave of high-volume models.”
GM currently only offers a few specific vehicles that use the Ultium battery pack. They include the Cadillac Lyric, an SUV; the GMC Hummer, which starts at around $90,000; and larger delivery vans made by a new division called BrightDrop.
This summer and fall, GM is expected to add three electric Chevrolets — the Blazer and Equinox SUVs — and an electric Silverado pickup. The company previously said the Silverado would be available for sale in the spring, but now the truck is not expected to go on sale until the fall.